Repair shops, body shops, tyre and service
Auto repair shop financing for parts float and equipment
Repair shops have two cash problems: parts you front before the customer pays, and diagnostic equipment that gets obsolete faster than it wears out. Most shops qualify on three months of bank statements showing $10,000+ in deposits and six months of history. Equipment financing is usually the cheapest route when the money has a specific machine attached to it.
The parts float nobody accounts for
A shop's balance sheet rarely shows the real constraint. You order the part, you pay the supplier on their terms, you do the work, and the customer pays when the car leaves. On a big job — an engine, a transmission, a full collision repair — you can be out several thousand dollars for a week or more on a single vehicle.
Run three of those at once and you have a working capital problem that has nothing to do with whether the shop is profitable.
The equipment cycle
The other pressure is the tooling. Scan tools, ADAS calibration equipment, alignment racks and lifts all have real costs and a real obsolescence curve. A shop that cannot calibrate driver-assistance systems is turning away work on late-model vehicles — which is increasingly most of the market.
That is a growth problem disguised as an equipment problem, and it is the single most common reason a shop calls us.
Insurance work changes the math
Body shops doing insurance work carry a different receivable profile than a general repair shop taking payment at pickup. Carriers pay on their own schedule, supplements take time to approve, and a shop with heavy DRP work is essentially extending credit to insurance companies. That is a receivable, and it can be funded as one.
What usually fits
Working capital
A lump sum repaid on a fixed schedule. The default answer when you need money for a specific thing with a known end date.
FastestMerchant cash advance
A purchase of future receivables, repaid as a share of daily sales. Fast, expensive, and the right tool less often than it is sold.
Most flexibleBusiness line of credit
Revolving credit you draw and repay as needed. Costs less over a year than repeated lump sums for the same problem.
Lowest costEquipment financing
The machine secures the deal, so the rate drops. Almost always the cheapest option when the money has a serial number attached.
If the need is a lift, an alignment rack, or a calibration system, look at equipment financing first — the machine secures the deal and the rate reflects that. If the need is parts float or a slow month, working capital or a line of credit sized to one cycle is the better shape.
What funders look at in this trade
| What they check | What helps you | What hurts you |
|---|---|---|
| Monthly deposits | Steady flow reflecting consistent car count | Long gaps or a single large deposit carrying the month |
| Payment mix | Healthy card and ACH volume | Heavy cash with deposits that do not match stated revenue |
| Insurance receivables | Aging under 60 days, documented | Large unapproved supplements sitting on the books |
| Facility | Owned, or a lease with real term remaining | Short lease relative to the payback period |
| Existing positions | Disclosed, or none | An undisclosed advance already debiting |
| Time in business | Two years plus widens options considerably | Under six months rules out most partners |
What this looks like in practice
A six-bay general repair shop, in business nine years, averaging $71,000 a month in deposits. The owner wants to add ADAS calibration to stop turning away late-model work. Equipment and the required calibration space run about $54,000.
This is a growth request, not a distress request, which changes what the strongest file looks like.
Equipment financing prices best here because the calibration rig is collateral and it holds value. The vendor quote goes in the file alongside the statements, and the funder is lending against something they can identify.
The shop also carries about $19,000 in parts float on any given week. That is a separate problem with a separate answer — a small line of credit drawn and repaid inside each cycle costs far less over a year than an advance taken once and paid down over six months.
The mistake to avoid is solving both with one large advance. It looks simpler and it is more expensive.
Example only. Actual rates, terms and outcomes are set by the funding partner and depend on your business.
Documents to have ready
- Three months of business bank statements as PDFs
- Equipment quote or vendor invoice, if financing a machine
- Merchant processing statements
- Insurance receivable aging, if you do DRP or collision work
- Shop lease or proof of property ownership
- Voided check, EIN letter, driver's licence
Straight answers
Can I finance used shop equipment?
Often yes, though terms are shorter and the funder will want a clear valuation. New equipment from an established vendor is straightforward. Private-party used equipment is the hardest case because verifying condition and title is difficult.
My shop is mostly cash. Does that hurt me?
It complicates things, because funders underwrite deposits and cash that never hits the bank is invisible to them. If your deposits do not support your stated revenue, expect a smaller offer. Depositing consistently for three months before applying materially improves the file.
Can I get funding to buy out a partner or another shop?
Revenue-based funding is generally the wrong tool for acquisition. It is priced for short-term working capital, not a multi-year asset purchase. An SBA loan or seller financing usually makes more sense; we can tell you where a file stands but this channel is not the fit.
How fast can equipment financing close?
Slower than an advance, faster than a bank. Expect a few business days rather than same-day, because the funder needs to verify the equipment and the vendor. That trade is usually worth it for the rate difference.